National Bank’s New Buyback Is Capped at 10 Million Shares, Not $2.25 Billion
National Bank of Canada said on Friday, September 25, 2026 that it intends to launch a new buyback, a normal course issuer bid repurchasing for cancellation up to 10,000,000 common shares for a maximum of $2.25 billion. That is approximately 2.6% of the 382,837,767 common shares outstanding on September 1, 2026. It needs approval from the Office of the Superintendent of Financial Institutions and the Toronto Stock Exchange, and the bank expects it to run from on or around October 9, 2026 to on or around October 8, 2027.
The $2.25 billion is the figure that travels. At Friday’s price it is not the figure that binds.
The share count is the constraint, not the dollar cap
Divide the dollar maximum by the share maximum and the two meet at $225.00 a share on our arithmetic: $2.25 billion across 10,000,000 shares. National Bank closed Friday at $212.23, up 1.35% on the day, inside a 52-week range of $146.73 to $237.13 (Source: StockAnalysis).
So the dollar ceiling binds only if the bank pays an average 6.0% above where the stock finished the week, which is not a remote case: National Bank closed its own third quarter at $226.75 on July 31, above that $225.00, per the Supplementary Financial Information, page 5. Below that, the share count stops the programme first. Ten million shares at $212.23 costs $2,122 million on our arithmetic, about $130 million short of the stated maximum. The stated purpose is narrow: the bid will “provide the Bank with additional flexibility to manage capital”, per the September 25 announcement of its intention to launch the bid.
The new authorization is smaller than the one it replaces
The bid that expired September 24 started smaller and grew. It began at up to 8,000,000 shares in September 2025 and was amended on March 12, 2026 to a ceiling of 14,500,000, an 81% increase in the authorization on our arithmetic.
The bank did not use all of it. Its Report to Shareholders for the third quarter of 2026 discloses 10,652,000 shares repurchased under the program at a price of $1,968 million, which is 73.5% of the enlarged ceiling through July 31 on our arithmetic. The new bid is sized at 10,000,000, well below what the retiring one allowed.
| Retiring bid | New bid | |
|---|---|---|
| Shares authorized | 8,000,000, raised to 14,500,000 on March 12, 2026 | 10,000,000 |
| Percentage of shares outstanding | 2.04%, raised to 3.70% | Approximately 2.6% |
| Maximum dollar amount | Not stated in the amendment release | $2.25 billion |
| Period | September 25, 2025 to September 24, 2026 | On or around October 9, 2026 to October 8, 2027 |
| Shares purchased | 10,652,000 for $1,968 million including tax, disclosed to July 31, 2026 | Not yet begun, subject to OSFI and TSX approval |
Source: National Bank of Canada, Report to Shareholders, Third Quarter 2026, page 26, and the September 25, 2026 buyback release.
What each bid allowed against what was actually bought. Source: National Bank of Canada, Report to Shareholders, Third Quarter 2026, page 26, and the September 25, 2026 buyback release. Purchases are disclosed to July 31, 2026; the bid ran to September 24.
What the retiring programme actually cost
Note 10 of the Report to Shareholders, “Share Capital and Other Equity Instruments”, says on page 78 that the bank “repurchased 9,266,600 common shares for $1,755 million, including tax” in the first nine months of fiscal 2026. The $1,968 million programme total is on that same basis. Across 10,652,000 shares that works out to $184.75 a share on our arithmetic, and it is an all-in cost including the federal repurchase tax rather than a market price.
The one market price disclosed under this bid is an average of $165.75, for the 6,376,200 shares the bank had repurchased as at February 28, 2026, in its March 10 amendment release. The stock closed Friday at $212.23, 28.0% above that average on our arithmetic.
The same note sets out where the whole count went. Those 9,266,600 shares came out, 1,799,033 went in on stock option exercises, and a further 16,944 came out through shares purchased or sold for trading, taking 391,065,541 common shares at October 31, 2025 to 383,581,030 at July 31, 2026. Add the 1,385,400 shares repurchased in the prior fiscal year under the same bid and the gross total is the 10,652,000 the bank discloses.
The buying had not stopped by August. The count fell from 383,581,030 at July 31 to 382,837,767 at September 1, a net decline of 743,263 shares on our arithmetic, and net is the operative word, because option exercises keep adding shares back while the bank buys.
What the programme is retiring is the price of Canadian Western Bank
National Bank paid for Canadian Western Bank in its own stock. The acquisition closed on February 3, 2025 by share exchange, valued at approximately $5 billion, and increased the outstanding common share count by 50,272,878, made up of 41,010,378 shares issued in the exchange and 9,262,500 from the automatic exchange of subscription receipts.
The peak came at July 31, 2025, at 391,967 thousand shares. From there to the 382,837,767 outstanding on September 1, 2026, the count is down about 9.13 million on our arithmetic, roughly 18.2% of what CWB cost in stock.
That is a net reduction, not a count of shares bought. Gross repurchases under the retiring bid were 10,652,000, and option issuance ran the other way at 1,799,033 shares in nine months. A fully executed new bid takes out 10,000,000 shares gross, but if options keep coming at anything like that pace, the count falls by meaningfully less than that.
Common shares outstanding at each quarter end, from National Bank’s Supplementary Financial Information, Third Quarter 2026, page 4, plus the September 1, 2026 count disclosed in the buyback release. The Canadian Western Bank issuance is from Note 10, pages 77 and 78 of the Report to Shareholders. Source: National Bank of Canada.
All of that sits on one line of the supplementary pack, “Number of common shares outstanding (thousands)” on page 4, one row among hundreds. Knowing which row carries the story is the skill our guide to reading financial statements is built around.
What full execution is worth per share
Ten million shares is 2.61% of the 382,837,767 outstanding. Retire that much of the count and the same earnings divide among fewer shares, which lifts earnings per share by about 2.7% on our arithmetic.
Diluted earnings per share were $9.39 for the nine months ended July 31, 2026. Annualised, that is a run rate of about $12.52, and a run rate is not a forecast: it assumes the fourth quarter looks like the average of the first three. Against that, 2.7% is roughly $0.34 a share a year.
The other side is book value. Book value per common share was $82.02 at July 31, 2026, and the bank publishes its own share price to book value ratio of 2.76 for the quarter in its Supplementary Financial Information, page 5. Friday’s $212.23 is 2.59 times that book value on our arithmetic. Repurchasing stock above book value reduces book value per share, which is the standard objection to a bank buyback, and it sits directly against the earnings accretion above.
The capital cost, and the buffer cut that freed it
The CET1 ratio was 13.5% at July 31, 2026, against 13.8% at October 31, 2025, while risk-weighted assets rose to $198.7 billion from $188.8 billion. The MD&A says what moved the ratios, on page 30: “The variation in the ratios was primarily driven by the repurchase of common shares for cancellation and the growth in RWA, partially offset by the net income, net of dividends.”
The floor for National Bank and the other major Canadian banks is a CET1 ratio of at least 11.0%, a floor that includes a 2.5% capital conservation buffer, a 1.0% surcharge for domestic systemically important banks and a 3.0% domestic stability buffer. At $198.7 billion of RWA, the 2.5 points between 13.5% and that floor is about $5.0 billion on our arithmetic, and the full $2,122 million is 1.07 points of the ratio, taking 13.5% to roughly 12.4% with RWA held constant.
It refills quickly. Third-quarter net income was $1,307 million, up 23% from $1,065 million, of which $1,266 million was attributable to common shareholders after $41 million of preferred dividends and distributions on other equity instruments. Against about $505 million of common dividends (382,837,767 shares at the declared $1.32), roughly $761 million was retained in the quarter. At that rate, $2,122 million of capital is back in about 2.8 quarters on our arithmetic.
The capital was freed sector-wide in June. On June 19, 2026, OSFI lowered the Domestic Stability Buffer to 3.0% from 3.5% with immediate effect, and cut the top of the range to 3% from 4%. Lowering “both the level and top end of the range”, it said, “will enable the banking sector to deploy its excess capital in support of Canada’s economic adaptation to new opportunities.” It put the Big Six average CET1 ratio at 13.5%, roughly $74 billion of excess capital, and Superintendent Peter Routledge said OSFI anticipated “Canada’s largest banks will use this capital release to invest in Canada’s economy through this period of structural change.” National Bank is putting some of its own share of that into retiring its stock.
It is not the largest claimant on the pile. Royal Bank’s bid, which opened June 12, 2026 and runs to June 11, 2027, covers up to 45 million shares, about 3.24% of its count, so National Bank’s 2.6% is the smaller programme in proportional terms. If you are weighing National Bank against the other five, our roundup of the Big Six bank stocks takes each lender in turn.
Fully used, the bid returns more cash than the common dividend
National Bank declared a common dividend of $1.32 a share, up 12% from $1.18, payable November 1 to holders of record on September 28. Annualise it at $5.28 across 382,837,767 shares and the common dividend costs about $2.02 billion a year on our arithmetic. The buyback authorization at Friday’s close is $2,122 million.
Put both against the market value of the company and they add up. The $2,122 million is about 2.6% of the $81.32 billion market capitalisation, a buyback yield; the dividend at $5.28 against $212.23 yields 2.49%. Fully used, the two together come to roughly 5.1% of total shareholder yield on our arithmetic.
What differs is the shape rather than the size: the dividend lands in your account, the buyback shows up as a smaller denominator. Readers who want to run the dividend half against their own position can do it in our dividend income calculator.
The case against reading too much into any of it
An issuer bid is permission, not a plan. National Bank left roughly a quarter of its last authorization unused through July 31 even after choosing to expand it, and nothing obliges it to buy a share of the new one.
The share cap is not fixed either. National Bank raised the last one by 81% in the middle of the bid, from 8,000,000 shares to 14,500,000 on March 12, 2026. A ceiling that has already moved once can move again, and the case that 10 million shares is the operative limit rests on this one holding.
The approvals are not in hand. OSFI and the Toronto Stock Exchange have yet to approve the bid, and the October 9 start is the bank’s own expectation.
Every capital scenario above holds RWA flat, and it has not been flat: RWA grew $9.9 billion in nine months. At that pace it consumes CET1 faster than the buyback does.
The 2.7% of accretion above will not show up in the reported numbers on that timetable. Diluted EPS is struck on a weighted average count, 390,025 thousand in the third quarter and higher than the actual count, so the benefit arrives with a lag and only to the extent the shares are bought.
The dollar cap can still bite. If the stock runs past $225.00 the bank buys fewer than 10 million shares rather than spending more dollars, and a 52-week high of $237.13 makes that concrete.
The final tally on the retiring bid, covering its last two months, arrives with fourth-quarter results in December.
Capital data as at July 31, 2026 and the share count as at September 1, 2026. Market data as of the close on Friday, September 25, 2026.
Disclaimer: The content on bestcanadianstocks.ca is for informational and entertainment purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always consult a qualified financial advisor before making investment decisions. Buyback terms are from National Bank of Canada’s September 25, 2026 announcement of its intention to launch a normal course issuer bid. The retiring bid’s terms are from the Report to Shareholders, Third Quarter 2026, page 26, and the March 10, 2026 amendment release, which is the source of the $165.75 average price to February 28, 2026. The share capital continuity, the ‘including tax’ basis of the $1,755 million and $1,968 million repurchase figures, the 1,799,033 shares issued on option exercises and the Canadian Western Bank issuance of 50,272,878 are from Note 10, pages 77 and 78, where the ‘including tax’ wording appears on page 78. Share counts by quarter and book value per share are from the Supplementary Financial Information, Third Quarter 2026, pages 4 and 5, which is also the source of the $226.75 close at July 31, 2026, and the September 1, 2026 count is from the buyback release. Capital ratios and risk-weighted assets are as at July 31, 2026 from the Q3 2026 release and Report to Shareholders pages 25, 29 and 30. Domestic Stability Buffer figures are from OSFI’s June 19, 2026 announcement. The closing price of $212.23, the 52-week range and the $81.32 billion market capitalisation are for Friday, September 25, 2026, from StockAnalysis. Derived figures, including the $225.00 implied ceiling price, the $184.75 all-in cost per share, the 73.5% utilisation through July 31, the 2.7% earnings accretion, the 2.59 times book value and the 1.07 percentage points of CET1, are our arithmetic on the figures above.
